Can Dyn harpoon Twitter's fail whale?

Wednesday

Oct 30, 2013 at 6:00 AMOct 30, 2013 at 6:56 AM

By Peter S. Cohan, WALL & MAIN

As Twitter begins its road show to pitch its $12 billion valuation, one question about Twitter will probably not be asked: Can anyone harpoon its fail whale? The goal of Manchester, New Hampshire-based Dyn is to keep Twitter — and its thousands of other customers — free of service interruptions.

Dyn's technology runs a Domain Name System (DNS), which is a table that looks up a number that refers to a numerical address on a computer known as a server when you type in the address of a website. Dyn helps the Internet run better. One way it does that is by picking a numerical address for a server that's physically close to your computer, so you get the content faster.

Dyn is on a roll, but it is unclear exactly how fast it is growing. According to an October 25 interview with founder and CEO, Jeremy Hitchcock, "We have had a fabulous year. Our revenues were $30 million in 2012 and in 2013 they will be more — I won't predict how much more. But I am optimistic about our future."

And Dyn seems to have plenty of customers. As Mr. Hitchcock, a graduate of Worcester Polytechnic Institute, explained, "We are adding 150 to 200 customers a month through direct sales and our remote access self-service has seen its customer base grow from 250,000 to 500,000."

Two of Dyn's services appear to be most in demand at the moment — what Mr. Hitchcock called traffic management and an email service. The traffic management helps companies analyze how well traffic is flowing through their networks; if there are any bottlenecks, and if so, where they are. It then reroutes traffic to servers that are closer to the content consumers so it gets there faster.

As Mr. Hitchcock explained, "If a Twitter user is located in London, there could be a 200 millisecond delay between the time the traffic is sent from Twitter's West Coast server and the time the user in London receives it. The user will be waiting for light to travel across the Atlantic Ocean from east to west. We regularize the content by managing how it flows through a multi-data center environment. So the people in London get their tweets faster."

The email service helps companies to conduct email marketing more effectively. According to Mr. Hitchcock, "Managing email marketing is a many to many problem. Our customers have emails coming from many data centers and arriving at consumers through many different service providers, through DSL and cable. We help customer determine whether the message they send is arriving at its intended destination or getting trapped in spam."

Mr. Hitchcock started Dyn after college. As he explained in a November 2012 interview, "I was born in New York but my parents moved to Manchester when I was about five years old. In 2000, I was a math and science geek and arrived in Worcester with a scholarship at Worcester Polytechnic Institute (WPI). I planned to be a chemistry major but changed my mind, switching to a major in computer science and management information systems."

Dyn was a science project that turned into a business. As he said, "Around 2000/2001, I got together with a group of four WPI friends and started working on an open source project. But we were running out of money so we put out a request for funds. Instead of raising the $25,000 we requested, we got $50,000, so we decided that we'd better not let down our contributors. Next, we incorporated Dyn — short for Dynamic Network Services, Inc. — and in December 2003, we pulled up Dyn's roots from Worcester and planted them in Manchester, because I wanted to return home to build the company."

Dyn has raised outside capital. In October 2012, it got $38 million in a round led by North Bridge Venture Partners. Dyn's board includes entrepreneur and angel investor Jason Calacanis, who joined in connection with that funding.

And Dyn is hiring talent, growing from 180 people last December to about 260 today.

As Mr. Hitchcock explained, "We look to hire people who think about routers and switches differently. Instead of thinking about the number of bits that can be pushed through them, we want people who think about the number of operations per second that they can process. We hired a product manager from 3Com, a VP of engineering from Comcast, and a VP of operations from Constant Contact."

Dyn's future will feature a "new story arc," explains Mr. Hitchcock. "We feel responsible for making outages go away. It is too easy for our clients to be hacked at a superficial layer of their networks and their web presence vanishes for hours."

If Dyn realizes Mr. Hitchcock's vision, it may harpoon Twitter's fail whale — and enrich its investors in the bargain.

Peter Cohan of Marlboro heads a management consulting and venture capital firm, and teaches business strategy and entrepreneurship at Babson College. His email address is peter@petercohan.com.

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